As Massachusetts GOP rips income surtax, Baker hangs on to wait-and-see approach

Posted
Saturday, May 21, 2016 6:15 pm

By Matt Murphy

State House News Service

BOSTON &GT;&GT; A day after House and Senate Republicans waged an unsuccessful fight against advancing a proposed surtax on households with incomes above $1 million in Massachusetts, Gov. Charlie Baker declined to slam the door shut on the possibility of him supporting the tax two years from now when, presumably, he will be on the ballot running for re-election.

Baker has opposed any suggestion of raising taxes during his first year-plus in office, and repeated on Tuesday that he's "not a big believer" in higher taxes to pay for new state spending.

But when pressed during a radio interview on Thursday about how he might vote should the tax proposal reach the ballot in 2018, Baker did not take the same hard line expressed by other Beacon Hill Republicans who have warned that the measure could be a jobs killer.

"I don't know. Let's see where we are when it gets there," Baker told WGBH's Boston Public Radio host Jim Braude.

The House and Senate voted 135-57 on Wednesday in favor of advancing the proposed constitutional amendment designed to generate $1.9 billion for education and transportation by assessing a new 4 percent surtax on households with incomes above $1 million.

A recent Boston Globe/Suffolk University poll also found enthusiasm for the measure among voters, with 70 percent saying they would support the amendment.

All but one of the 40 Republicans in the House and Senate voted against advancing the question to the next legislative session in 2017-2018, where it will again need at least 50 votes to be put before voters in November 2018.

Baker, who refused during his last campaign for governor to sign a no-new-taxes pledge, described himself Thursday as a "let the people decide" guy, and acknowledged that he had, in fact, signed the tax petition on the same radio show after Braude presented him with the papers. Supporters of the tax on Wednesday repeatedly cited the petition's 157,000 signers as demonstrative of support for the idea.

"We're still working our way through the process, obviously, on that one, but I'm not a big believer in raising taxes on people in Massachusetts. They've paid a lot more taxes on a lot of things over the course of the last few years and I think ' incumbent on the commonwealth to demonstrate that we can live within our means," Baker said.

The governor pointed to the work of the MBTA Fiscal and Management Control Board, which he said has proven in less than a year that it's possible to "improve performance" and "save money at the same time."

The transit authority is dependent on significant assistance from the state budget, where many accounts are being squeezed year after year, to make fiscal ends meet.

The governor's reluctance to categorically reject the idea of taxing income over $1 million at a higher rate than other income stands in contrast to other Republicans who warned that the tax would send the wrong message to the small business community and wealthy investors that the state leans on to create jobs.

Senate Minority Leader Bruce Tarr of Gloucester called the proposed tax on millionaires a "success penalty."

Republican Sen. Vinny deMacedo of Plymouth told the News Service this week, "We like millionaires when they come and they build businesses and they create jobs, however we've got to be mindful of the message that tax policy sends."

Rep. Geoff Diehl, a Whitman Republican, told his colleagues during debate Wednesday that "the real intent of this quote unquote millionaire's tax is nothing more than a bait and switch. It's just a way to open the door to higher income tax rates all levels. Once the tax code becomes divided between two brackets, precedent will be set for creating new brackets and making the code more and more progressive, also hitting the middle class the hardest once high income earners move themselves or their assets out of state."

Baker senior advisor Tim Buckley, calling to clarify the governor's remarks, said Baker remains supportive of ballot referendums, but reiterated, "The governor does not believe it's a good idea to raise taxes on the people of Massachusetts, and we don't even know if we will have this decision before voters."

Massachusetts Republican Party Chairwoman Kirsten Hughes blasted Wednesday's vote of the Legislature as proof of Democrats' "unquenchable thirst for spending," and pointed to Baker's efforts last year to close a $1.8 billion deficit without raising taxes.

"Democrats in the Legislature should realize we can't tax our way to prosperity," Hughes said.

Asked about the governor's comments on Thursday, party spokesman Terry MacCormack stood behind Baker: "Governor Baker has been a strong advocate for fiscal responsibility, balancing budget deficits without raising taxes, and making state government more accountable and efficient."

Baker famously refused to sign a pledge forswearing new taxes when he ran successfully for governor in 2014 after taking the pledge four years earlier.

At the time, he said, "I'm a reform before revenue guy and I'm going to be the taxpayers' best friend on that whole question, but one of the things that I learned with respect to the pledge is that if you take the pledge you're basically singing up for the status quo."

Calling the tax code "extremely messy," Baker also said, "I would hate to put myself in a position where if we actually came up with a way to simplify and make the tax code more sensible and more business and consumer and people friendly that somehow I would have a pledge in place that would make it impossible for me to go ahead and execute on that."

Democrats who favor the tax say it would help rectify a "regressive" tax system under which many low-income families pay a higher effective tax rate than the wealthiest residents of the state. Tax supporters also say education and transportation spending needs have been chronically underfunded.

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